Last week, the president of Venezuela, Nicolas Maduro announced that his so-called national “cryptocurrency” Petro should gain more than 150% in value starting December 1, which is above the national fiat currency of the sovereign bolivar, Bloomberg reports.
“The price for the Petro cryptocurrency will rise from 3,600 sovereign bolivars [Bs.s] to 9,000,” he said.
The monthly minimum income has also raised from 1,800 to 4,500 sovereign bolivars.
In August this year Maduro pegged the price of Petro to the new sovereign bolivar and has set the size of the new minimum wage in the country to be half the Petro, that is, 1.8 thousand bolivars, or 180 million old bolivars.
“Each Petro, as the anchor point of the sovereign bolívar, will have a value of 3,600 Bs.s,” he said back then.
Commenting on Maduro’s latest decision, Venezuelan economist Leonardo Buniak said that previously national crypto “was worth 3,600 Bs.s because the Dicom dollar cost 60 and the oil cost 60, “but now the situation is so that one “Petro is decreed at 9,000 Bs.s … you have just devalued the sovereign Bolivar with respect to the Petro and by more than 100%,” adding:
"Anchoring the bolivar to the Petro is anchoring it to nothing,” quotes his words the local edition Atodomomento.
Buniak also drew attention to the fact that Petro cannot be considered cryptocurrency at all, because its value is set by the president.
“When the president decrees that a Petro is worth 9,000 Bs.s, what he is saying is that the Petro is not a cryptocurrency but a debt title that is predetermined, [which] cannot be mined. It is impossible to think that it is a cryptocurrency when its value is not given by the interaction between supply and demand,” he said.
Petro cryptocurrency has proven to be unpopular since its launch in February 2018 as it’s almost impossible to purchase. The currency is also banned in the U.S.
Petro's wallet remains inactive. All the links that suppose to lead you to download versions for Windows and Linux return a message about its imminent release. Venezuelan Economy Minister Tarek El Aissami had previously reported that Google removed Petro’s wallet from its app store.
Petro’s code also remains unopen to the public, which is why the confirmation of its functionality and existence is impossible. Petro has no data on online activity, confirmed transactions and other traditional cryptocurrency metrics. The blockchain block explorer of the Venezuelan authorities testifies that 3.138 blocks have been released up to date, while crypto’s white paper refers to a block time of one minute.
On November 26, Maduro announced the creation of "tourist zones", whose visitors will be able to pay with "international cryptocurrency, government cryptocurrency Petro and international currencies."
Recall that several days prior to that, the Constitutional National Assembly of Venezuela approved amendments to the laws, designed to strengthen the national cryptocurrency Petro.
Gerson Hernandes, the head of the business sector development department and member of the Commission of Diversified and Productive Economy said that the main purpose of lawmaking is to provide greater support to the business sector, so that merchants can invest and carry out transactions in cryptocurrency, avoiding international sanctions that restrict the financial and economic development of Venezuela.
Hernandez said: "With this mechanism, all doors are open to export in the international market and also minimize imports."
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